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A form of payment to a brokerage in which the brokerage receives a percentage of the value of each transaction that a client orders. Commissions are seen as advantageous to a client because if the client does not make orders, then he/she does not have to pay a broker. However, commissions create an incentive for brokers to make as many transactions as possible; this has resulted in the regulation of commissions by the SEC. The percentage of a commission varies by brokerage, with those charging higher commissions offering a wider variety of investment advisory services. Low-commission brokerages usually offer no investment advice and simply fill orders. See also: Fee.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
sales commissionincentive payments made to the firm's own SALES REPRESENTATIVES for reaching/exceeding specified SALES targets. Where a firm employs AGENTS to sell its products, commissions are used as the primary form of remuneration. See SALES AGENCY.
Collins Dictionary of Business, 3rd ed. © 2002, 2005 C Pass, B Lowes, A Pendleton, L Chadwick, D O’Reilly and M Afferson